20 Apr

Casino strategy boon for PA budget, can Medical Marijuana do the same?

Medical Marijuana compared to PA's Legalized Casino StrategyApril 17, 2016 represented a momentous occasion in the state of Pennsylvania. That was the day Gov. Tom Wolf lent his signature to Senate Bill 3, legalizing medical marijuana for production, distribution and medicinal use. Whether PA’s valley farmers will be able to benefit from it is uncertain, but it’s already being compared to the casino strategy invoked by the Keystone State over a decade ago.

In 2004, Pennsylvania lawmakers chose to supplement a flagging budget with the authorization of casino gambling. In the beginning, only slot machines were permitted. In 2010, the law was amended to include table games like blackjack and roulette.

Pennsylvania’s casino strategy has harvested billions of dollars for the state budget, and could see yet another expansion if legislators choose to move forward with a bill to legalize online gambling.

While Gov. Wolf lauded the passage of the medical marijuana bill as a way to provide “long overdue medical relief” that will “improve the quality of life for patients and their families throughout Pennsylvania,” it’s also expected to have a similar impact on tax coffers, bringing in a hefty amount of money for the administration.

As was the case in 2004 when gambling companies began applying for a casino license, the first wave of income will come from the application process for cannabis growers and distributors. But the way regulators set up the process, it could leave most of Pennsylvania’s farmers out of the loop.

At a meeting yesterday of the  Greater Susquehanna Valley Chamber of Commerce’s Agricultural Committee, Benjamin Ranck spoke on behalf of Rep. Fred Keller, trying to give the GSVCC a few answers to their most pressing questions. At the top of the list was whether the Valley’s farmers had any future in marijuana.

Unfortunately, that was one question he could not answer definitively, saying it was anyone’s guess at this point. “If I was in the business of guessing, I would have won the Powerball,” he quipped. But he did point out that the legislation only provides for a maximum of 25 licenses for growers and processors, and 50 for distributors.

The problem for most PA farmers is the initial cost. The bill requires all grower applications to be accompanied by a $10,000, non-refundable application fee. If approved, the grower must then pay a $200,000 fee for a 1-year permit.

“It isn’t like mom-and-pop farms are going to start growing marijuana,” Ranck explained.

There’s a throng of other requirements that must be met as well, from background checks for each and every person to be involved in the growth of medical marijuana, to providing detailed documents describing how and where the operation will be run, secured, tested, etc.

Bob Garrett, President and CEO of the Chamber, said he is interested in the prospect of increasing the Valley’s economy, and wants to learn more about the potential of medical marijuana. However, as he said at Tuesday’s meeting, “What we haven’t heard is that there is going to be an upside.”

Attorney Rob Davidson of RHP Law Group chimed in, comparing the legalization of medicinal marijuana to the state’s authorization of gambling. Pennsylvania’s casino strategy is a progressive one that started with slots, expanded to table games and will likely lead to online gambling within the next few years.

Once “they have their foot in the door,” said Davidson, “it will start expanding the changes. Who knows where we will end up?”

Whether that projected expansion will be a boon or bane for Pennsylvania’s agricultural community is yet to be seen.